Schroder Real Estate Net Asset Value and Dividend Declaration

 
TIDMSREI 
 
For release 7 February 2018 
 
                 Schroder Real Estate Investment Trust Limited 
 
       ANNOUNCEMENT OF NAV AND DIVIDEND FOR QUARTER TO 31 DECEMBER 2017 
 
Schroder Real Estate Investment Trust (the 'Company'), the actively managed 
UK-focused REIT, announces its net asset value ('NAV') and dividend for the 
quarter to 31 December 2017. 
 
Net Asset Value 
 
The unaudited NAV as at 31 December 2017 was GBP345.5 million or 66.6 pence per 
share ('pps').  This reflects an increase of 1.4% per share compared with the 
NAV as at 30 September 2017, or a NAV total return, including the dividend of 
0.62 pps, of 2.3%.  A breakdown is set out below: 
 
                        GBPm    pps   Comments 
 
NAV as at 30          340.6   65.7 
September 2017 
 
Unrealised change in   8.4    1.6   Reflects a quarterly like-for-like 
valuation of direct                 increase in the value of the 
property portfolio                  underlying portfolio of 1.8% before 
                                    capital expenditure.  Note that this 
                                    includes the underlying valuation 
                                    movement in the joint ventures. 
 
Capital expenditure   (2.4)  (0.5)  Capital expenditure including the 
                                    Premier Inn at Leeds Arndale Centre 
                                    of GBP1.2 million and Stacey Bushes 
                                    Industrial Estate in Milton Keynes of 
                                    GBP0.3 million. 
 
Realised gains on      0.5    0.1   Profit on the disposal of No. 1 
disposal                            Riverside Exchange in Sheffield. 
 
Net revenue            1.6    0.3   Net revenue impacted by one-off 
                                    abortive transaction costs of GBP1.5 
                                    million. 
 
Dividends paid        (3.2)  (0.6)  Reflects an annualised dividend of GBP 
                                    12.8 million or 2.48 pps. 
 
NAV as at 31 December 345.5   66.6 
2017 
 
Quarterly dividend cover, ignoring one-off abortive transaction costs, was 
97%.  Dividend cover was also negatively impacted by 11% as a result of the 
accounting treatment of the rent free relating to the Sheffield office 
disposal. 
 
Dividend payment 
 
The Company announces an interim dividend of 0.62 pence per share ('pps') for 
the period 1 October 2017 to 31 December 2017.  The dividend payment will be 
made on 7 March 2018 to shareholders on the register as at 16 February 2018. 
The ex-dividend date will be 15 February 2018.  The dividend of 0.62 pps will 
be designated 35 pps as an interim property income distribution ('PID') and 27 
pps as an interim ordinary dividend. 
 
Performance versus MSCI Index 
 
Over the quarter to 31 December 2017 the underlying portfolio produced a total 
return of 3% compared with the MSCI Index at 3.3%.  For calendar 2017 the 
underlying portfolio produced a total return of 12.9% compared with MSCI of 
10.8%. 
 
Property portfolio 
 
As at 31 December 2017, the underlying portfolio comprised 44 properties valued 
at GBP468.1 million.  At the same date the portfolio produced a rent of GBP26.9 
million per annum reflecting a net initial yield of 5.4%.  The portfolio rental 
value is GBP33.4 million per annum, resulting in a reversionary yield of 7.1%. 
 
As at 31 December 2017 the void rate was 6.6% and the average unexpired lease 
term, assuming all tenants vacate at the earliest opportunity, was 6.9 years. 
The tables below summarise the portfolio information as at 31 December 2017: 
 
        Sector weightings                      Weighting % 
 
                                        SREIT            MSCI Index* 
 
             Retail                      30.2               35.9 
 
             Offices                     37.3               30.8 
 
           Industrial                    26.1               23.3 
 
              Other                      6.4                10.0 
 
* Latest available MSCI Index data as at 30 September 2017 
 
Regional weightings                            Weighting % 
 
                                        SREIT            MSCI Index* 
 
Central London                           7.6                14.5 
 
South East excluding Central             29.2               38.4 
London 
 
Rest of South                            6.9                15.8 
 
Midlands and Wales                       27.5               14.1 
 
North and Scotland                       28.8               17.2 
 
* Latest available MSCI Index data as at 30 September 2017 
 
Asset management 
 
Milton Keynes, Stacey Bushes Industrial Estate 
 
During the quarter four lettings and lease renewals completed at a total rent 
of GBP164,000 per annum, reflecting rents of between GBP5.75 and GBP7.95 per sq ft. 
The estate provides further income growth potential with an average rent and 
rental value of GBP5 and GBP6 per sq ft respectively. After adjusting for 
refurbishment expenditure, this contributed to a 7% increase in the capital 
value over the quarter to GBP27.8 million. 
 
Leeds, Headingley Arndale Centre 
 
The lease to Premier Inn Hotels Limited completed in December following 
completion of the works to convert part of the asset from office to hotel use. 
Premier Inn took a twenty year lease at a rent of GBP421,400 per annum with 
inflation linked rent reviews.  The Premier Inn is expected to positively 
impact footfall and, after adjusting for capital expenditure, contributed to a 
1.8% increase in the value over the quarter to GBP28.7 million. 
 
Debt 
 
The Company has two loan facilities from Canada Life and Royal Bank of Scotland 
('RBS') totalling GBP150.1 million with an average duration of approximately 8.2 
years and an average interest cost of 4.4%.  The loans are fully compliant with 
their covenants. 
 
In addition to the properties secured against the Canada Life and RBS loan 
facilities, the Company has unsecured properties with a value of GBP77.3 million 
and cash of approximately GBP30.4 million.   This results in a loan to value 
ratio, net of cash, of approximately 25.6%. 
 
                                    -ENDS- 
 
For further information: 
 
Schroder Real Estate Investment Management   020 7658 6000 
Limited: 
Duncan Owen / Nick Montgomery 
 
Northern Trust:                              01481 745529 
James Machon / Fraser Hiddelston 
 
FTI Consulting:                              020 3727 1000 
Dido Laurimore / Ellie Sweeney/Richard Gotla 
 
 
 
END 
 

(END) Dow Jones Newswires

February 07, 2018 02:00 ET (07:00 GMT)